Most companies focus on traditional implementation models that have been successful in the past, but these models make it almost impossible to capture the real value from the cloud. Siloed business initiatives such as next-generation application hosting or data platforms will not suffice to capture the value of the cloud. Instead, companies should treat cloud adoption as a business-technology transformation by doing three things: focusing investments on business domains where cloud can enable increased revenues and improved margins, selecting a technology and sourcing model that aligns with business strategy and risk constraints, and developing and implementing an operating model that is oriented around the cloud.
The scale and scope of change required to exploit the cloud opportunity fully are immense. CIOs and CTOs must drive cloud adoption, but they also need support and air cover from the rest of the management team. Unlike past successful programs to adopt Linux x86 processes or server virtualization, implementing the cloud is more challenging. First, the thousands of applications a large enterprise might have built over the past three decades need remediation or re-architecting to run efficiently, securely and resiliently in the cloud. Second, the economics, skills, processes, and organizational changes required are too complex and span too many parts of the business for infrastructure heads to manage on their own.
Despite the challenges posed by cloud adoption, not using the cloud to enable digital transformation has resulted in companies experiencing one or more failure modes. Some companies have succeeded in implementing a few greenfield applications on public-cloud platforms, but the value derived from these programs has been limited, making further progress impossible. Cloud initiatives become jammed up in long queues because IT cannot build out the automation or reference architectures required to use public-cloud-platform services in a secure, resilient, and compliant fashion.
The migration of significant portions of the technology environment, largely by replacing on-premises virtual machines with off-premises ones without taking advantage of cloud-optimization levers, has failed to significantly reduce costs or increase flexibility. Support for cloud initiatives subsequently collapses when value is not delivered. Tech leadership must have an aligned vision and provide the required guidance or management oversight to ensure that developers can configure cloud services with consistent approaches and tooling without significant security, resiliency, and compliance risks.
In conclusion, companies need to focus their investments and build a cloud-ready operating model to fully realize the benefits of cloud technology. The cloud opportunity is immense, but capturing its full value requires a business-technology transformation and a holistic approach to operating in the cloud. In addition, CIOs and CTOs need to drive cloud adoption, but they also need support and air cover from the rest of the management team. By taking these steps, companies will be able to accelerate digital transformation through cloud platforms and stay competitive in today's rapidly evolving business world.